Tampa, Fla. (July 18, 2012) - WellCare Health Plans, Inc. (NYSE: WCG) today announced that it has entered into an agreement with Humana Inc. (NYSE: HUM) to acquire select assets of Arcadian Health Plan, Inc.'s Desert Canyon Community Care Medicare Advantage plans in Arizona. The plans are part of a previously announced, government-required divestiture for Humana to complete its acquisition of Arcadian Health.
Under the agreement, Desert Canyon members in Mohave and Yavapai Counties will become WellCare of Arizona members on January 1, 2013. Currently, the Desert Canyon plans have approximately 5,000 members in these counties. The transaction is expected to close on December 31, 2012, subject to regulatory approvals.
"This acquisition is a significant strategic step for WellCare focused on increasing our presence in a very attractive state," said Alec Cunningham, chief executive officer of WellCare. "It is complementary to our current Medicare Prescription Drug Plan business in Arizona, and it positions us for future growth and expansion into other areas of the state. We look forward to working with the Mohave and Yavapai communities and providers to ensure that Desert Canyon's Medicare Advantage plan members continue to receive quality, cost-effective health care solutions."
Desert Canyon Medicare Advantage plan members will experience no change in their plan benefits and coverage in 2012, and Desert Canyon will notify members of 2013 benefits and coverage. WellCare will work closely with Desert Canyon to help ensure a smooth transition.
This acquisition will make Arizona the 12th state in which WellCare offers Medicare Advantage plans. As of March 31, 2012, WellCare served approximately 150,000 Medicare Advantage members in 11 states and served approximately 10,000 Medicare Prescription Drug Plan members in Arizona. WellCare is not disclosing the financial terms of the transaction. The acquisition is expected to be accretive to WellCare's net income.
About WellCare Health Plans, Inc.
WellCare Health Plans, Inc. provides managed care services targeted to government-sponsored health care programs, focusing on Medicaid and Medicare. Headquartered in Tampa, Florida, WellCare offers a variety of health plans for families, children, and the aged, blind, and disabled, as well as prescription drug plans. The company served approximately 2.5 million members nationwide as of March 31, 2012. For more information about WellCare, please visit the company's website at https://www.wellcare.com.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains "forward-looking" statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," and similar expressions are forward-looking statements. The company's financial outlook contains forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that may cause WellCare's actual future results to differ materially from those projected or contemplated in the forward-looking statements. These risks and uncertainties include, but are not limited to, WellCare's progress on top priorities such as improving health care quality and access, ensuring a competitive cost position, and delivering prudent, profitable growth.
Additional information concerning these and other important risks and uncertainties can be found under the captions "Forward-Looking Statements" and "Risk Factors" in the company's Annual Report on Form 10-K for the year ended December 31, 2011, and other subsequent filings by WellCare with the U.S. Securities and Exchange Commission, which contain discussions of WellCare's business and the various factors that may affect it. WellCare undertakes no duty to update these forward-looking statements to reflect any future events, developments, or otherwise.
Crystal Warwell Walker